Lease to own... will this keep the house off the market?

Rental Property
1

My brother and sister-in-law just entered into a rent-to-own agreement. The lease states, ‘For informational purposes only: landlord is willing to enter into a purchase agreement with tenant for x amount of dollars at any time during lease period. Landlord will honor purchase price of x amount until 12/01/27. Landlord will credit 3% of purchase price as a rental credit towards purchase price of loan closing costs.’ They are doing this because they don’t have the money to buy the property now but believe they will in three years. My question is, will this keep the house off the market or could the owner change their mind and sell it from under them?

2

There’s nothing in this that would stop the landlord from selling the house to someone else. The ‘informational purposes only’ part means there’s no commitment. Only about 7% of these actually end up in a sale, so it’s not looking good. Don’t put money into improving the house since it might not be yours.

3

I agree. The house is fully renovated, so no improvements needed. Just hope they don’t make these $4k rent payments and end up with nothing.

4

Vick said:
I agree. The house is fully renovated, so no improvements needed. Just hope they don’t make these $4k rent payments and end up with nothing.

There’s a 93% chance that’s exactly what will happen.

5

@Nico
Risky for sure… IDK why sellers do rent-to-own deals.

6

Vick said:
@Nico
Risky for sure… IDK why sellers do rent-to-own deals.

To take advantage of renters who think they’ll own the house. There’s a house in my neighborhood that’s gone through several rent-to-own deals. After the last housing crash, a lot of people lost their homes and their credit. The owner would evict them, keep the money, and move on to the next renter. It was sad seeing moving trucks in the driveway.

7

@Nico
I think it’s more like 97%.

8

If they have a roof over their heads, they are getting something.

9

Willow said:
If they have a roof over their heads, they are getting something.

They had a perfectly good rental at half the price.

10

I don’t deal with rent-to-own because of buyer’s remorse. Most make money because the sale doesn’t close. The tenant cancels before the end, and it goes back as a new rent-to-own for the next renter. Standard renting is better until you can buy with a mortgage.